T.S. ELLIS, III, District Judge.
In this APA § 706(1)
Defendants have moved to dismiss the action for lack of subject matter jurisdiction on the ground that the APA does not authorize judicial review in these circumstances because there is, at this time, no administrative action that is "legally required." Norton v. S. Utah Wilderness Alliance ("SUWA"), 542 U.S. 55, 62, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) (emphasis in original). Alternatively, defendants argue that the claims in plaintiff's complaint are unripe for judicial review and are otherwise unfit candidates for the exercise of discretionary declaratory judgment jurisdiction. Accordingly, defendants' threshold motion presents the following questions:
A brief overview of the PTO's patent examination process provides useful context for the resolution of the parties' dispute.
The PTO is responsible for "the granting and issuing of patents," which it does after conducting a thorough examination of patent applications in a process known as prosecution. 35 U.S.C. §§ 2(a)(1), 131. Prosecution begins with the submission of a patent application containing a written description of the invention to be patented, the manner and process of making and using it — called the specification — and concluding with "one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor ... regards as the invention." 35 U.S.C. §§ 111, 112; Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1257 (Fed.Cir.1989) (noting that the claims "provide[] the metes and bounds of the right which the patent confers on the patentee to exclude others").
On receiving a patent application, the PTO is statutorily required to "cause an examination to be made of the application and the alleged new invention." 35 U.S.C. § 131. Typically, such an examination is undertaken by a patent examiner with relevant scientific or technical competence, who reviews each proposed claim in the application for novelty, support in the specification's written description, and compliance with other patentability requirements and statutes. 37 C.F.R. § 1.104(a)(1). After this initial examination, the examiner sends the applicant an "office action," which may allow or reject the patent claims. 37 C.F.R. § 1.111(a). If any claims are rejected, the applicant may respond with amendments, evidence of patentability, arguments in favor of patentability, or some combination thereof. 37 C.F.R. § 1.111(b) (stating that the applicant's reply must "specifically point[] out supposed errors in the examiner's action and must reply to every ground of objection and rejection in the prior Office action"). In the course of prosecution, the examiner may issue a Requirement or Information directing the applicant to submit "such information as may be reasonably necessary to properly examine or treat the matter." 37 C.F.R. § 1.105(a)(1). In sum, patent examination is typically a back-and-forth, iterative process resulting ultimately in the patent examiner allowing or rejecting one or more of the claims in the patent application. See 4 West's Fed. Admin. Prac. § 3934 ("[W]hile the normal prosecution of an application is denominated an ex parte proceeding, it is, in fact, a two-sided affair.").
In the event that one or more of the claims in the patent application have been twice rejected by the patent examiner, the applicant may appeal to the PTO Appeal Board. 35 U.S.C. § 134; 37 C.F.R. § 41.31. To appeal, the applicant must file a notice of appeal and then an appeal brief within two months of filing the notice. 37 C.F.R. §§ 41.31(a)(1), 41.37(a). Upon the filing of an appeal brief, the patent examiner may, "within such time as may be directed by the Director," file an "examiner's answer" setting forth the grounds on which the application was rejected. 37 C.F.R. § 41.39(a). Section 1207.02 of the Manual of Patent Examination Procedure ("MPEP") recommends that a patent examiner
Nor is this the sole means by which the appeal process can be stopped. After an applicant has filed an appeal brief but before jurisdiction passes to the Appeal Board, either the applicant or the examiner may re-open examination and prevent the Appeal Board from gaining jurisdiction over the application. See 37 C.F.R. § 41.35(b).
Given this general description of the patent prosecution process, the facts pertinent to the pending motion may now be more readily understood. Plaintiff currently has 399 patent applications pending with the PTO, all of which were filed before June 8, 1995. Eighty of these applications are the subject of this suit. Plaintiff's patent applications, including the 80 at issue here, are far from typical in various important respects, including the number of claims asserted and the length of the patent specifications. Whereas the average patent application asserts 16 to 17 claims, each of plaintiff's 80 patent applications asserts, on average, 299 claims.
Although not identical, the prosecution histories of the 80 patent applications can fairly be described as essentially similar. This essentially similar history can be described as follows: First, plaintiff filed almost all of the applications in issue in mid-1995, prior to the enactment of major changes in patent law pursuant to the Uruguay Round Agreements Act.
Plaintiff eventually appealed to the Appeal Board the final rejections of his claims in the 80 patent applications by filing notices of appeal and appeal briefs. This occurred in most cases between 2004 and 2007.
In 2013, the PTO re-opened examination of the patent applications,
Thus, the 80 patent applications in issue here have been pending before the PTO for twenty years without final agency action that could be appealed to the Court of Appeals for the Federal Circuit or a district court.
Section 706(1) of the APA authorizes a reviewing court to "compel agency action unlawfully withheld or unreasonably delayed." 5 U.S.C. § 706(1). Judicial review under this provision is thus limited in two ways. First, a plaintiff must allege that the action withheld or delayed is an "agency action" within the meaning of the APA. Second, this action must be unlawfully withheld or unreasonably delayed; that is, the action withheld or delayed must be legally required.
An understanding of the agency action requirement must begin with the APA's definition of that term as the issuance of a "rule, order, license, sanction, or relief, or the equivalent or denial thereof, or failure to act." 5 U.S.C. § 551(13). The Supreme Court in SUWA elucidated the definition of agency action for purposes of a § 706(1)
The second requirement for § 706(1) review — that the action plaintiff seeks to compel is legally required — means that a court cannot compel even discrete and circumscribed agency action if that action is not "demanded by law." Id. at 65, 124 S.Ct. 2373. The Supreme Court in SUWA noted that the APA's requirement that the withholding or delay be "unlawful" relates to the traditional mandamus remedy, which "was normally limited to enforcement of a specific, unequivocal command." Id. at 63, 124 S.Ct. 2373 (internal quotation omitted).
The allegations in plaintiff's complaint meet both of these § 706(1) requirements. First, with respect to § 706(1)'s agency action requirement, plaintiff's complaint, fairly read, clearly and fundamentally seeks a final, appealable PTO decision on the patentability of his 80 now twenty-year-old applications, action that is entrusted to, and statutorily required of, the PTO. See 35 U.S.C. § 131 (stating that the PTO Director "shall cause an examination to be made" of patent applications and, where appropriate, "shall issue a patent therefor"). Nor can there be any doubt that the PTO's issuance or denial of a patent constitutes agency action; indeed, the § 551(13) definition explicitly includes as an example the issuance or denial of a "license," which is in the nature of and
It is equally clear that § 706(1)'s second requirement for judicial review is also present here. The unreasonably delayed agency action that plaintiff complains of is the PTO's final decision on the patentability of his 80 applications. The patent statute provides that the Director of the PTO "shall cause an examination to be made of the application and the alleged new invention; and if on such examination it appears that the applicant is entitled to a patent under the law, the Director shall issue a patent therefor." 35 U.S.C. § 131 (emphasis added). Further, if the PTO determines that the invention is unpatentable, "the Director shall notify the applicant thereof, stating the reasons for such rejection." § 132(a) (emphasis added); see also 37 C.F.R. § 1.104(c)(1). This mandatory language makes clear that the PTO is legally required to examine patent applications and ultimately to issue a patent or reject the application where warranted. Accordingly, rendering a final decision on plaintiff's 80 patent applications meets the requirements for subject matter jurisdiction under § 706(1) and defendants' motion to dismiss on this ground must be denied.
Defendants further contend that there is no jurisdiction here because Congress expressly granted the PTO authority and discretion "to establish regulations governing the conduct of proceedings in the Office," including the procedures, deadlines, and requirements for the examination of applications. 35 U.S.C. § 2(b)(2)(A); In re Bogese, 303 F.3d 1362, 1368 (Fed.Cir.2002). But even where the manner of an agency's action is left to that agency's discretion, courts may compel the agency to take discrete and legally required agency action without dictating the content of that action. SUWA, 542 U.S. at 65, 124 S.Ct. 2373; Kaufman v. Mukasey, 524 F.3d 1334, 1338 (D.C.Cir.2008); see also Hamandi v. Chertoff, 550 F.Supp.2d 46, 50 (D.D.C.2008) (holding that where U.S. Citizenship and Immigration Services was required to adjudicate naturalization applications, it was required by the APA to do so within a reasonable time regardless of whether the Immigration and Naturalization Act specifies a timeframe for action). It is plain, therefore, that even though the manner of prosecuting applications — and, in typical circumstances, the pace at which they are reviewed — is left to the discretion of the PTO, because final agency action on a patent application is a discrete, legally required action, the PTO is still bound by the APA to complete the action "within a reasonable time." 5 U.S.C. § 555(b) ("With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it."). Just as the PTO could not put plaintiff's applications in a drawer to be ignored, it may not unreasonably delay taking legally required agency action on them.
Additionally, defendants caution that finding jurisdiction here would entangle the Court in the adjudication of patent applications that are now in the midst of active prosecution, pointing to the Supreme Court's admonition that the APA's jurisdictional limitations are intended to protect against judicial interference with agencies' lawful discretion. SUWA, 542 U.S. at 67, 124 S.Ct. 2373 ("The prospect of pervasive oversight by federal courts over the manner and pace of agency compliance with such congressional directives is not contemplated by the APA."). Yet, although avoiding excessive entanglement with matters rightfully left to the agency's
Finally, defendants contend that judicial review is unwarranted at this time because plaintiff's applications are in active prosecution that will require consideration of plaintiff's recent amendments to his claims and his responses to the Requirement limiting the number of claims he may bring in each application. Although framed as a jurisdictional argument, the argument actually addresses the merits of the § 706(1) issue, namely whether the PTO's delay in processing plaintiff's applications is reasonable or unreasonable.
In sum, plaintiff is entitled to review of defendants' allegedly unreasonable delay in concluding discrete and specific agency action which the PTO is legally required to take. In fact, it may be that the jurisdictional limitations of the APA and concerns about entanglement preclude the precise remedy plaintiff seeks, that is, an injunction against reopening examination of the 80 patent applications and a schedule for final Appeal Board decisions. Nevertheless, the APA clearly creates federal subject matter jurisdiction under § 706(1) to hear plaintiff's claim that the PTO has unreasonably delayed or withheld final agency action on his 80 now twenty-year-old patent applications. Accordingly, defendants' motion to dismiss must be denied on this ground.
Defendants next contend that the claims in plaintiff's complaint are not ripe for
It is well-settled that there is no federal subject matter jurisdiction over a matter that is unripe. See Sansotta v. Town of Nags Head, 724 F.3d 533, 548 (4th Cir.2013). Courts consider two factors in determining whether a matter is ripe for judicial review: (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding judicial consideration. Nat'l Park Hospitality Ass'n v. Dept. of Interior, 538 U.S. 803, 808, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003). It is abundantly clear that these factors demonstrate that plaintiff's complaint, properly construed, is ripe for judicial decision. As already discussed, plaintiff seeks final decisions on his applications, which have been thus far delayed by suspensions of prosecution and the PTO's failure to file examiner's answers to plaintiff's appeal briefs. The reasonableness or unreasonableness of this delay is an issue fit for judicial decision, and withholding judicial consideration of the issue would cause plaintiff hardship by potentially further delaying the final decision on his applications that this suit was brought to compel. Moreover, this is not an example of a case in which plaintiff fears a future harm; plaintiff has alleged that unreasonable delay has already occurred and continues to occur. To hold, as defendants urge, that plaintiff's claim that the examination of his patent applications has been unreasonably delayed is unripe because that examination is still ongoing would render the "unreasonable delay" provision of § 706(1) completely meaningless. Indeed, far from being unripe, it appears that plaintiff's claim is, if anything, overripe. Final agency action on plaintiff's 80 patent applications has now been delayed so long — twenty years — that it seems likely that the value of plaintiff's purported inventions has been impaired. Accordingly, plaintiff's claims are ripe and defendants' motion to dismiss on this ground must be denied.
Finally, defendants contend that plaintiff's claim for declaratory relief should be dismissed as there is no sound reason for the exercise of discretionary Declaratory Judgment Act jurisdiction. The Declaratory Judgment Act authorizes federal courts to "declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). A claim for a declaratory judgment must (i) meet the constitutional "case or controversy" requirement and also (ii) present a valid basis for subject matter jurisdiction. Dunn Computer Corp. v. Loudcloud, Inc., 133 F.Supp.2d 823, 826 (E.D.Va.2001). As already concluded, these prerequisites are met here. The examination and disposition of patent applications is a discrete agency action required by law, and thus there is subject matter jurisdiction to determine whether this action has been unreasonably delayed. Furthermore, the action is ripe for judicial disposition, and therefore presents a constitutional case or controversy under Article III.
Even when both of these requirements are met, the district court retains discretion
For the reasons stated herein, defendants' motion to dismiss must be denied in all respects. An appropriate Order will issue.